In Marin v. Dave & Buster’s, Inc. S.D.N.Y., No. 1:15-CV-03608, (May 8, 2015), a former employee filed a class action suit claiming Dave & Buster’s moved her and others to a part-time schedule to avoid providing benefits under the Affordable Care Act.  The case is being closely watched because it is the first to use the Employee Retirement Income Security Act of 1974 (ERISA) to allege interference with employees’ benefits under the Affordable Care Act and because of the potential implications employers’ ability to structure and determine the composition of their workforce. According to the employee, the company informed employees that it would cut its full-time workforce to avoid increased costs associated with complying with coverage mandates under the Affordable Care Act and subsequently moved her to a schedule of less than 20 hours per week on average after she had worked a full-time schedule of 30-45 hours per week for over 7 years. On February 9, 2016, the Southern District of New York issued an order denying Dave and Buster’s motion to dismiss and allowing the employee’s claims to move forward.

Section 510 of ERISA provides that it is unlawful for an employer “to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary … for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.”  InMarin, the employee’s claim is that her hours were reduced to below 20 hours a week on average for the purpose of interfering with her eligibility for continued health benefits.  Based on her manager’s explanation of the company’s plan to “right-size” (reduce) its full-time workforce, language from the company’s SEC filings, and other evidence, the court concluded that the employee stated an ERISA Section 510 claim and rejected the argument that the employee is required to show more than a lost opportunity to earn future benefits to state such a claim.

We will be following the case as it progresses and will provide updates on future significant events.   

To read a copy of the Court's order, click here: Download Marin v. Dave Busters 2.9.16 Order-22489153